Paul Graham Said His Startup Was Worthless—2 Months Later He Hit $1M ARR. | Jon Noronha, Co-Founder of Gamma

Pablo Srugo (00:00:00):
Once you turned on monetization. How fast did you kind of figure out retention and then get to a million ARR, for example?

Jon Noronha (00:00:06):
And this is the crazy thing. So we fully roll out monetization by early July. I believe, if I have the numbers right. That by August, or maybe it was early September. We crossed a million ARR and became cashflow positive. All these VCs start engaging with it negatively. I actually remember Paul Graham replied to the tweet and said, making slides is not the most valuable tool in business. Anybody who thinks this is not making a good business. Yeah, someone told me that product market fit is the moment you stop worrying about how to get new users and start worrying about how to keep up with the users you have.

Previous Guests (00:00:36):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is product market fit.

Pablo Srugo (00:00:49):
Do you think the product market fit show, has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests, thank you. Jon, welcome to the show, man.

Jon Noronha (00:01:04):
Great to be here. Thanks for having me.

Pablo Srugo (00:01:05):
Dude, so I was just literally before this call. I was actually late. Because I was I was testing out the product. I was playing with Gamma and it's pretty sick. Actually, what I did. I fed it the transcript of the latest podcast and then I just had to build a carousel for me. And I mean, you know, spits out. Obviously, illustrations and all that stuff. I'd have to, I think, play around with text and stuff. But for just an output with a click of a button, it was pretty sick.

Jon Noronha (00:01:28):
It's funny because when we started the product. We never had any idea people would actually use the final output as output. It was always supposed to be just the rough draft, the illustration. But what's amazing is as AI has come so far. The people are like, yeah pretty good, hit publish.

Pablo Srugo (00:01:41):
What are you seeing? I will go into this, but I'm curious. What are you seeing as the main use cases for it?

Jon Noronha (00:01:46):
Yeah, I would say where we got our start. We'll talk more about that, was all about presentation. So it was things like pitch decks, sales decks, that kind of thing and that's still. I would say, our biggest source of strength is anybody who has something high stakes to present. Especially anybody who is selling themselves as a service. So like a consultant, a freelancer, a sales team, an agency. When there's some kind of high stakes person you've got to impress or thing on the line. That's where we see the most usage.

Pablo Srugo (00:02:10):
Got it. Well, let's go through the story, man. When did you start working on this?

Jon Noronha (00:02:15):
So the company started just about five years ago now, in 2020. We started first talking about it, early that year. So right around the time that COVID had hit. It was a crazy time in lots of ways, but it was particularly a crazy time in software. Because all these new productivity tools were emerging to address this new behavior of remote work. So you had tools like Zoom that were popping off. Slack, even tools that were already successful. Like say Loom just had this crazy inflection point of so much more usage going on and we were really jazzed about that. As sort of a direction, my co-founders and I. We were trying to figure out what's next and my co-founder Grant was the first one to float the idea of what if we worked on presentations? He was reflecting on how he was joining all these Zoom meetings from a park bench outside of his house. Because his wife was also taking calls in the same building, and tried to just follow a Zoom meeting from his phone. Just like see what's on the text of the slide and he's like, it's crazy that no one has rethought presentations for mobile. Which is not even the current technology trend. It's like the ten years ago technology trend. But nobody's thought about what they mean for remote work, async work and so we got  really into that idea. As soon as he said it, basically. I just saw all these ways in which presentations felt stale to me. I mean, I've never liked using PowerPoint or Google Slides and I don't think most people do. It's usually a source of dread for people. If I say to you like, hey, you have a huge presentation and it's due Friday. And your promotion depends on doing it well. That's not a good feeling that most people have. When they think about that. But it's actually just how the world runs. It's how a huge part of the world ticks and so that's got me more excited realizing. There's this sort of universal practice of presentations. Huge total addressable market. The stat that I heard when we started the company was that PowerPoint and Google Slides each have something like 500 million monthly active users. So there's like a billion people making presentations every month and they're all doing it mostly the same way. And they're mostly not happy about it. And there was a sort of trend behind it of work was changing. So I was like, wow, this is a hard one.

Pablo Srugo (00:04:13):
What were you guys doing at the time? What was your background? Were you already thinking of starting something? Were you already working on different things? Or what were you doing?

Jon Noronha (00:04:22):
Yeah, good question. No, so two out of three of us worked at a company called Optimizely at the time. A/B Testing and the third had previously worked there. But already had gone on to another startup and Optimizely got acquired that summer. And so there was kind of this period where we knew acquisitions coming, but it hasn't closed yet. And so there was this moment of like, well, what's next? What do we want to do? I was kind of going through my own soul searching. Do I want to be a founder? Do I want to join another company? Do I want to stay?

Pablo Srugo (00:04:50):
Have you been a founder before?

Jon Noronha (00:04:52):
No, first time. First time for all of us, actually. So, and I hadn't necessarily thought like, oh, I need to be a founder, I must be an entrepreneur. That wasn't really my journey. For me, it was actually much more thinking about team. I was a VP of product at the time, and I had hired a lot of great people. Had a lot of people I loved working with and I was just like, what could I work on? Where I could build a great team, work with the best people? I realized the acquisition was this amazing moment. Where there's going to be all these great people who are suddenly looking for a new gig and if there was a place I could gather them up. It would just be this incredible shortcut to hiring. You could speed through the hardest part of getting that early stage startup off the ground.

Pablo Srugo (00:05:29):
And what do you do when this idea comes around. Your co-founder talks about presentations. What's your first like? Do you just jump on it or do you start trying to validate the idea somehow?

Jon Noronha (00:05:39):
For me, I had a million ideas already. So I had a million feature ideas. I'm a product guy. So that's the first thing I thought of. I'm like, what if you could do this? What if you could do that? What if you could? I remember my brain spinning of like, what if you had just, like, Slack has reactions? What if slides have reactions? My co-founder, Grant, my other co-founder, James, had already made a first prototype. where slides were responsive on mobile and they would scale on your phone. That just opened my mind. I was like, what if you could embed things in the slides? What if it was live and interactive? So I'm a product guy, that's where my brain went. Then there's a different part of my brain. Which is maybe the founder brain. Which was like, wait a second, is this a business? And so then I went down this other spiral of, Gosh, PowerPoint hasn't been replaced in 40 years. Why hasn't PowerPoint been replaced in 40 years? So I got to thinking, well, what are all the startups that have tried this? I remember using Prezi probably 15 years ago now. There was Pitch funded a few years ago. I did my best to kind of research those and see. But to be honest, this is actually my weakness as a founder. I didn't dwell on that stuff. I just thought there's a sick product to be made here and I believe we could put together a team that could do it.

Pablo Srugo (00:06:44):
What was the outcome, though? Of looking into those companies? Did you find out anything?

Jon Noronha (00:06:48):
A little bit. My takeaway from Prezi was, I remember using it when I was in college and my takeaway was they'd never escaped the student trap. Their slides were fun and cool looking. And easy to make, but they never really reached the grade of professional. This isn't a seriously professional tool. And the other tools I thought of that came to mind were. There's Keynote and Google Slides, which are successful products. But to me, they're basically just PowerPoint clones for a different platform bolted into sort of a suite. Then there's Pitch that had come along a few years ago. Which was much more focused on building a Keynote-like tool. My takeaway from them was they just didn't do enough that was different. They basically made yet another Keynote clone in the cloud. My feeling was nobody had tried rethinking the format itself of a presentation. They tried to make better PowerPoint editors, but it was still just making the same 16:9 slide format that you click through with clip art and text. And so the thing in my mind was, what if we were a little bolder? What if we tried to actually rethink the format of presentations itself? And what if our why now, was this huge trend around remote and hybrid work? So that's what kind of stuck with me.

Pablo Srugo (00:07:53):
And so when do you? Do you guys leave or you just wait out the acquisition and then you start? What's the timeline?

Jon Noronha (00:07:58):
We left pretty much as quickly as we could and we. Not only do we leave as quickly as we could. We tried to raise money as quickly as we could. So that we could actually hire in that moment of time. So we were able to raise a pretty steep amount.

Pablo Srugo (00:08:13):
That was a good market, no? Or was that like, 2021 was crazy. What was the market like when you started those. Right as things were picking up?

Jon Noronha (00:08:19):
Yeah, so this was like fall 2020 and it was beginning to be a crazy market. I don't think we knew how crazy it was yet. But I remember being shocked how easy it was to raise money. I was a first time founder and to be fair, my co-founder did it. I'm sure he worked really hard, but I just thought it would be a long process. But no, I think we worked for a successful YC company. So we had the brand and we had enough connections from that. And we built a pretty sick demo pretty quickly. Which made it all easier. Which, by the way, now wouldn't cut it. Because anybody could vibe code the same thing in an afternoon. But at the time, I think it was still a good signal.

Pablo Srugo (00:08:53):
What was it? Tell me more about that. What was the demo?

Jon Noronha (00:08:55):
So we wanted to build a presentation company that would actually stretch the format of what a presentation is, and we had to make a pitch deck. So we decided that the pitch deck was the demo and the demo was the pitch deck. So we basically made an interactive hybrid document presentation. So we would send it to all these investors as a pre-read ahead of time. But then there was a button in it, that was like a play button. Where the whole content would morph into a presentation, but stay in sync with the doc and so you could view the same content two ways. And it was like very fluid. And we just pulled out all the stops of just a bunch of, honestly, half-baked ideas of what are the things we think a presentation could be. So for example, there was a slide in there that was like the team and instead of putting a bunch of information about the team. We just embedded our three LinkedIn profiles of the founders as little scrollable documents inside the slide. Very simple idea that ended up becoming part of our product. Which was that, yeah, you can embed live interactive stuff inside. We did a lot of really cool stuff with animations. Just showing, you know, if you break out of this PowerPoint paradigm and use more modern web technology. You can do like 3D stuff and zoomy effects, and things like that. We built interactivity. So the idea I mentioned earlier that struck me of like, what if you could react to a presentation? We built that, where if you just held down your mouse. You could do a giant thumbs up on a slide and we would actually. When we would go pitch people, we would do it collaboratively and in the middle of the presentation. I would start reacting while Grant demoed it and you would see these emojis go off. And we wanted to give people that same feeling they had, maybe the first time they used Slack. Because we were very much trying to position ourselves as like in the same family and spirit as those things.

Pablo Srugo (00:10:26):
This was a pre-seed I assume. How much were you trying to raise?

Jon Noronha (00:10:28):
Pre-seed, yeah, we were only trying to raise like a million, million and a half. We ended up raising more. I think we raised around $2,5 million. Partly because it was, an easier market than we expected. But I think we also wanted to plan for, like, this could take a while. These kinds of products take a long time to hit. I had researched enough of these other productivity tools, like say Figma. In their early days, and they all had this curve of a very long flat line before they really took off.

Pablo Srugo (00:10:55):
Yes, Notion had the same thing.

Jon Noronha (00:10:57):
Yeah, Notion, similar story. These horizontal products that are very product-led and serve a lot of different personas. It's actually harder to get that early stage validation, and you have to build a ton. Just to get to parity with the old tools before they become useful. So we kind of erred on the side of raising more.

Pablo Srugo (00:11:12):
Was it mainly angels or VCs?

Jon Noronha (00:11:14):
It was a mix. So we did some small pre-seed funds and then we also had some angel investors.

Pablo Srugo (00:11:20):
So and then I guess you just get the building. Like you get the hiring and building. That's what you do? That with the money?

Jon Noronha (00:11:25):
Yeah, so we ended up hiring our first three people shortly after that. So we were like a team of six pretty early on and we just went straight into building. And even before building actually was prototyping, and research. So we had the general problem we wanted to go after. Which is presentations like, rethink PowerPoint. So actually the first thing we did was user research. We basically each used our networks and tried to find like ten or fifteen people we could talk to. So this was maybe like a hundred people total we talked to, and it was really easy. Just like find ten people you know who make presentations. This was not like a very hard thing.

Pablo Srugo (00:11:55):
Which is everyone.

Jon Noronha (00:11:57):
Yeah, and that's why I was so excited about this idea. It's not hard to find potential customers and we just asked them really simple questions. We just said, tell me about the last time you made a presentation. How did it start? Why were you making it? What tool did you use? What was that process like? And it was not hard to get people to complain about their current tools. Generally, the current tools were either PowerPoint or Google Slides. A handful of people would use Keynote or something fancy. But generally, Google Slides, among our techie people was the one and they just described their problems. And we kind of just got collated what we heard from all the calls. And it was amazing to see the sameness of what we heard. So, you know, of those hundred people. It was consultants and doctors, and teachers, and product managers, and software engineers, and just all different kinds of jobs. But if you were to blank out the names of who said what in the interviews. I don't think you'd be able to tell what their job was, because they were all saying the same stuff and the same stuff was generally three buckets. Biggest one by far is, I just spend so much time formatting. Presentations are all about formatting. So a really common sentiment was I spend ninety percent of my time on the formatting and ten percent of the time on the content. And that feels so broken, and backwards. And there was a related one about knowing how to tell the story or structure the ideas. So people would say something like, I just don't really know the right way to organize these. I don't know the right template to use. I feel like I'm just throwing this together, and I'm not really getting things across in the most compelling way. And then there was this third idea that really kind of tied it all together. Which was this kind of universal feeling of, I feel like I'm being judged. It's like the expression, don't judge a book by its cover. Everybody feels like they're the book and the PowerPoint is the cover. And people are only paying attention to how things look, and not what they're trying to say. And so there was just this clear universal problem across lots of different people that they have these high stakes things they're trying to get across, in whatever job they do. And instead of being able to focus on their message. They're so focused on the fine grained pixel moving around that it distracts them from getting their message across and they end up feeling nervous and uncomfortable, and scared about this whole process. Which means they're not going into whatever that presentation is, with the confidence that lets them tell that story as well they could.

Pablo Srugo (00:14:19):
And was that news to you? Because it does sound different from the stuff you were at least demoing. Which was like the kind of bells and whistles, the reactions, the embedding and these sort of things.

Jon Noronha (00:14:31):
Absolutely, yeah no, you're totally right. What we had early on was bells and whistles. And I think the bells, and whistles did work at impressing investors. But they didn't matter in what the actual user said and it turns out. Now that we've actually built a business around it. They don't matter that much to the users. So I think that was a classic example of maybe being distracted by shiny things versus the user problems. But what was good about this research process was those user problems came out loud and clear, and they were broad. And so we really got to work on this question of, what would it take to make? What would it look like to build a compelling visual presentation with none of the formatting getting in the way? What would that feel like? And we actually, you know, we had some detours along the way. We actually spent three months trying to build a Zoom competitor. We had this whole idea of what if the presentation was the video platform and it was all kind of like one little hub that you have the meeting in. There were a lot of other tools like this in 2020 taking off. What were they called? I don't remember, but they were all just tools for virtual meetings. Basically and we got kind of distracted by that. But we kind of drifted back to our original idea. Which was, there's really something here about. We should make it as easy to write a presentation as it is to write a document. Because when people talk about using Microsoft Word or Google Docs. They don't talk in the same way. They don't say like, oh my gosh, it's so hard to format things. It's so hard to make it look pretty. There's this freedom people feel when writing a document of, I just write stuff and it can be messy. It can be rough, but I'm just in thinking mode and there's still problems. People still don't know exactly what words to use or whatever. But still it's like there's this lightness in how they describe it, but it's not how it comes along in presentations. Presentations are heavy and docs are light. And so that was our original concept. We kind of came up with a slogan for our first launch that was, "Write like a doc, present like a deck." And so we spent probably a year building towards. Maybe not that long, maybe six months, building towards our first beta version of a product. That would just let you write a document and then it had a present mode that would like really visually bring it to life, and make it stand out.

Pablo Srugo (00:16:34):
So we would convert? Like, the idea was you would write normal text and then it would convert it to slides.

Jon Noronha (00:16:40):
Exactly and this is all pre-AI.

Pablo Srugo (00:16:41):
This is before AI that's doing the stuff you're doing today? This is more like basic slides? I would think.

Jon Noronha (00:16:47):
Totally, these were all very deterministic rules. Like zoom up certain text and put animation focus on a certain area. And put imagery in the right places. But all very handwritten and coded. And it was all, even just the editing environment. So we took a ton of inspiration from Notion. Notion, unlike, say, Google Docs, has this block-based writing environment. Where you can write text, but you can also drag in images or drag in embeds, or tables, and they all kind of flow together. And you don't have this sort of absolute positioning of things. You do have sort of like columns, but it's this more sort of responsive webpage mindset. Where you're just kind of stacking things on top of each other, and so we built a whole editor around this concept of, a Notion-like editor. That had this then visual presentation output that is very different than what you get out of Notion.

Pablo Srugo (00:17:39):
It's crazy how much you probably have to build. Just to get people to be able to use it and start to see if you're even onto something, or just completely wrong.

Jon Noronha (00:17:48):
It's so hard because, who wants to do any kind of real work in a version of this that's half-baked? And there's a million little things you have to get right. If the undo button doesn't work in a text editor. You're out, you're just out. If you ever lose anybody's data, if they ever push a button and a paragraph of stuff they spent time in is done. They're gone and they're never coming back. One of the features we realized. I actually did this whole PM thing. Where I  looked at even Google Docs and I just tried to make a very simple spec of like. Which of these features are must have and there's a lot of things that I cut from that. In the spirit of we have to make something simple fast. One thing that I cut was version history. So being able to go back to early versions of a document and roll back. I thought was not essential. Very quickly, we learned actually it is essential and the way we learned it was we were dogfooding so much. We were using the product ourselves and we would mess something up. We'd want to go back and there was no way to go back. And we'd be like, I hate this product. I'm never using this again. I can't do it and so yeah, it was a steep hill to climb. We realized there was just so much to do to get to parity and it's very scary. Because you have to do all this feature parity work. But if you just do feature parity, no one's going to use your product. You also have to do innovation different work, so that it is like unique and differentiated. But you kind of don't know if your differentiation stuff's going to work, until there's enough parity in there for someone to actually use it.

Pablo Srugo (00:19:10):
When do you launch the first version?

Jon Noronha (00:19:12):
I believe we launched the first version fall of 2021. So roughly a year into our life as a company. So, we raised money and started fall 2020 and then launched the first beta version fall 2021.

Pablo Srugo (00:19:25):
How did you launch it and how did it go?

Jon Noronha (00:19:28):
What I really mean is we had a landing page and a TechCrunch article. So we basically made a signup form on our site. We had a very simple landing page. I think it was just our tagline, "Write like a doc, present like a deck." And maybe a little bit of content, and a signup form of just join the waitlist. We actually managed to raise even more money at this time. So we raised a proper seed round from Accel. I actually think that was only possible, because it was an incredibly frothy time. But it turned out to be crucial, because we didn't really have traction yet. We had a good team. I think by that time we had a pretty solid team of like eight, but no traction whatsoever.

Pablo Srugo (00:20:04):
How many people? Eight, okay.

Jon Noronha (00:20:06):
I think there were eight people by then, and it was clear we had a lot more to do.

Pablo Srugo (00:20:11):
And how much did you raise?

Jon Noronha (00:20:12):
I think we raised $3 million at that time. On top of maybe like two and change we'd raised before that. So we're at around five or six total at this point.

Pablo Srugo (00:20:19):
And what happens when you launch?

Jon Noronha (00:20:20):
So we put up this waitlist. We managed to get a TechCrunch article about the fundraise. Which drives some people to the waitlist and we also ask all of our investors to promote it. I think one single investor, which was Julie Zhuo. One of our angel investors, had a tweet about it that went semi-viral and when I say semi-viral. I mean hundreds of likes, nothing crazy. But that, I think her and TechCrunch together got us around 2,000 signups to our waitlist. 

Pablo Srugo (00:20:48):
Oh, wow.

Jon Noronha (00:20:49):
Which dwindled, you know, we got that and then it was pretty much over. But now we had 2000 emails of people that expressed interest in trying this crazy new thing and we had now a very basic beta version of our products. Like a thing that, yeah, you could write a doc and present in it. But I mean, looking back, I can't imagine what real presentation you would have done. It was, it's very simple and, you know, we. All through this year, we kind of realized we need to have some kind of compass. How do we know we're on the right track? And it was honestly too early to have real users be the compass. Because the product wasn't actually good yet. I mean, you can get friends to use it as kind of a pity thing and give you feedback. But it's not genuine and so actually for that first year or so, our compass was using it ourselves. We forced ourselves to do all our work inside this editor environment. So we would write all our own docs and we even created fake reasons to give presentations. Because by the way, a startup of eight people does not need presentations.

Pablo Srugo (00:21:42):
I was going to say. How many docs are you doing, man?

Jon Noronha (00:21:46):
Zero for real, but we forced ourselves. So, anytime we would do a demo for our team. Which we would do demos three times a week at 11 a.m. That was our cadence of how we operated. We would ask people to make a short presentation about what they made and it's really simple. It's like a title and three bullet points, and a picture. And then they would do their demo, but it just forced us to use the product. We even started this tradition that became a core part of how we operate called GammaRama. Which is, it's basically like a TED talk. It's a presentation about a fun topic that you're into and every week on Friday. Somebody on our team would just make a presentation about something they're into, like the McRib coming back to McDonald's or a diet that's only eating croissants and we would just make someone be the guinea pig that week to like actually use it to make something real. And then we would do their presentation, it was fun and we'd all critique it. And then they would basically shit on the product. And say, here are all the things that was terrible about the product. When I tried to use this, these like 15 things were broken and that was our fuel for the next week of go fix those 15 things.

Pablo Srugo (00:22:45):
When do you feel comfortable putting this in real users' hands? What's the bar that you're waiting on?

Jon Noronha (00:22:51):
So that was basically that one-year point of the fall. Where we felt like we had enough that somebody could actually use it for real work and at least it wouldn't break on them. We didn't actually think it was good yet, but at least it wouldn't break on them and we had this waitlist of 2,000. We thought about, should we just flood all 2,000 and have them try it, and see who sticks? But I'm really glad that we didn't. Because what we chose to do instead was basically 20 a week. So we're like, we're going to just send out 20 of these invites a week. We're going to let them try it, and we're going to take their feedback. And same thing we did dogfooding. Every week, we are going to take their feedback as fuel, make the product better, and then do another 20. And then we're also going to see how many of those 20 end up sticking, and using the product. And honestly, those first few months, we would send out 20 invites. Maybe five would actually sign up and try it. Maybe two would give us feedback and probably zero would actually stick as recurring users. But even that feedback we got was usually interesting. There was usually something pretty important and meaningful in it. And so we just kept that going. And what was nice was we had 2000 to pull from. So we weren't actually out of people. We had something to look forward to every week of what would come. After though, maybe let's say, I don't know. Three or four months of this. We would now be at the point, where we actually felt comfortable sending more. Maybe we would send 50 now and of those 50, maybe 25 would try it out. And maybe actually now, 10 would give us feedback. And maybe actually two would keep using it for more than a week. And actually give us more feedback.

Pablo Srugo (00:24:24):
And what were some of the big things that you learned? In those first four months? 

Jon Noronha (00:24:28):
Gosh, there was so much around just the little things, like the fluidity of editing and writing. There was a lot around what would stop someone from using it for real work and this is actually where we started to, maybe get our first glimmer of hard questions. I should have asked when we started the company of, why haven't people moved off PowerPoint in all this time? And it turns out there were all these sort of centralizing forces around PowerPoint, that I hadn't fully considered. For example, people have their company brand. That's obviously really important. I can't just make slides that are plain black and white. I need to have them in my company style and if I deviate from that, then people aren't paying attention to me. They're paying attention to my slides being wrong. Which that was the whole problem we were trying to solve in the first place and so we really put a lot of work into, theming and styling. And giving people the tools to really match their brand. But we also learned about stuff like. Our company stores everything in this one place in SharePoint and if you can't go in SharePoint. Then this thing's not going to fly. I think we also really learned that we don't exist in an island. So people would say, yeah, I made something kind of cool in your product. But if I can't turn it into a PDF at the end of the day, to send it to the client, then it's useless to me. In fact, it's worse than useless. Because I wasted all my time making something that looks like here. But now I have to go recreate it somewhere else to send it. We had all these ambitions to be this new, crazy, different medium, but a lot of what people were saying is, no. I need you to actually interoperate with my world and with the world I actually operated.

Pablo Srugo (00:25:59):
Do you start seeing signs that you're in this mode for at least four months. Where you're just iterating and improving the product? You're probably getting some results as of it. As you're saying you're getting more and more people using it. Are you starting to get worried that there isn't? That you're just gonna be stuck in this mode of one more feature, one more feature. Or what's the mindset kind of at the end of, I guess. We're, what end of 21', early 22' at this point?

Jon Noronha (00:26:26):
Yeah, I think we're right around there. I think I'm an irrational optimist and so no. I was not getting as worried as maybe I should have been. Because what I actually saw was, I kept seeing the signs of progress. I saw that our ratio was improving. A lot of people were actually sticking with the product and we would get just enough glimmers that there's something here. That it made sense to keep going. We would get somebody who's a recruiter who would say, I'm actually using this to make all my offer letters I send to candidates. Because it's so much faster and it's so easy to make something visual, and compelling. We would have consultants be like, oh, I'm actually making these proposals and I just find it's so much faster, and easier. So really our fuel that year was a couple of early adopters and believers who saw what we saw. And I think what helped was that we believed in ourselves. Because we were also doing this dogfooding and we could see the rate of change. We could see how much it was improving and we could. I think we started to hit this point. Now we're probably talking like early 2022. Where we didn't feel it was a chore to use our own product. We actually felt it was a pain to go back to Google Docs. Once we're going back in Google Docs or Google Slides, we're like, oh, I don't want to be here. Get me back to Gamma as soon as possible and a very small number of users were kind of confirming that feeling. But honestly, objectively, not many. It probably wasn't looking good to an outside observer.

Pablo Srugo (00:27:42):
What were your investors saying? I'm curious.

Jon Noronha (00:27:44):
Honestly, these early-stage investors are just not that involved and hands-on. They are just taking their cues from us.

Pablo Srugo (00:27:48):
Right, especially the massive funds, like Accel does. They got other things to worry about.

Jon Noronha (00:27:53):
They have massive funds, they have tons of customers. They're like, you tell us when you need us. But they were not checking in regularly. If they gave anything, they were cheerleaders. They're like, wow, the product's getting so much better, so fast, but they're taking their cues from us. Sometimes I wonder if it would have been good or bad to have more adult supervision. But the truth was we had very little.

Pablo Srugo (00:28:08):
I'm really worried because listen, you've been listening for like what? 10, 20, 30 minutes now. Clearly you like it and the thing is. The next episode is way better and you're gonna miss it. You're gonna miss it. Because you're not following the show. So take your phone out and hit that follow button. I mean, at the beginning. I think earlier stage investors, that are truly earlier stage. Might have been on you a little bit sooner on, like, hey, is this really going anywhere? But at the end of the day. They're certainly not going to sell the product for you anyway. So I don't think it would have made much of a difference. So you're in 2022, you're starting to grow. What are you fully live at this point? Do you have, like, are you running ads? How are you getting more inbound? Because the 2000 list, I'm assuming is drying up.

Jon Noronha (00:28:50):
We're still working our way down that list and we're still getting some more on the top of it. Occasionally we're having moments. Where we're coming up on Twitter or whatever it is, or an article. So we'll get some more on the top, but mostly we're actually still burning down it. But I think at some point in like early to mid 2022. We start to build conviction like, okay, this product's actually getting good. We think it's time for public beta and public beta means to us, it's not a waitlist. You can just go to the site and sign up, and use it. And that also means transitioning from, we were onboarding people by hand. We were offering for anybody who wanted to use it, like, we'll walk you through it. We'll show you how it works, we'll help you out, but we needed to have fully self-serve onboarding. Anybody can just sign up and use this thing. And they will hopefully understand it enough. That they can just dive in and use it. And so, that was the milestone we pointed to. We decided to launch on Product Hunt and we set ourselves a target of that August. We'd launch on Product Hunt, and we had a bunch of product. Where we sort of aimed to get in and land, as part of that launch. So it was all hands on deck effort, very focused. Also at that point, all second guessing ends. It's not like, are we building the right thing? It's like, we just need to make this launch happen and we need to make it great. And we'll see what happens after that. And so fast forward a few months, we put a ton of work in, we get to the point that we're really believing in the product. We do the launch, we put a ton of work into the launch itself. I'm very nervous about what's gonna happen and how it's gonna go. We do the launch and it goes pretty well. The way it goes pretty well is, we first of all. We win number one product of the day on Product Hunt. To be honest, mainly by just getting everybody we know to upvote us.

Pablo Srugo (00:30:23):
That's how everybody does it, I think.

Jon Noronha (00:30:24):
How genuine it was, but it still felt good. Felt good to win and then not only that. Got product of the week and product of the month. So we actually really crushed it on Product Hunt. We got a bunch of signups relative to where we'd been before. Keep in mind, before this point. We'd been onboarding between 20 and 100 people a week. Suddenly we were getting, I think we got like thousands of signups that first day. Maybe like 5,000 signups and people are coming in the product. And they're starting to actually use it. And maybe best of all, after that first day. More people keep signing up. So it's not like it's just a one-time blip. There's at least some continuity. People are reposting us other places. I think they're maybe telling their friends about it to some degree. So we do see more signups. So we're feeling good overall and this puts us in a mode now. For the next few months of we've basically like 10x to 100X the number of users we have and so it's like, let's just see what they're running into. I set up this process to auto email every single person who signed up. A few days after they joined to just say, hey, I'm Jon. I'm the founder. I want to hear how it's going. Tell me how we could improve and we get tons of great feedback from that. Feedback from people who use the product. Also people who signed up and never used the product. Tell us why it didn't actually make sense and so we got tons of things to work on from that. We kind of start to get in this mode of like, well, let's just iterate on product quality. Except at the same time that we're like, oh, this is great. We have some traction now. Team's feeling good, let's iterate on quality. The world around us is actually changing a lot in this late 2022 time. The fundraising market is going from super optimistic to super dark and pessimistic. And suddenly we're starting to realize like, oh shit. Even though we actually finally have real traction or real users. The expectations have changed so much. Even though we have all that traction, we might still be out of business in like a year.

Pablo Srugo (00:32:18):
That's how much run you had end of 22', but a year runway?

Jon Noronha (00:32:21):
Yeah, I think we had. I think shortly after our Product Hunt launch. Which was like fall 22', we have like a year and a half of runway. And so we're thinking about that one year point. And we're like, oh, so now we actually have probably six months before we need to raise money again. And so, where do we need to be to raise money again? And we start having just early conversations with potential Series A investors. And we very quickly realize that the landscape has changed a lot under our feet. Our first fundraisers I would describe as, honestly almost effortless. I was shocked how easy they were and we went from effortless to what I would characterize as impossible. Suddenly everybody we talked to is like, they wouldn't even really tell us what the bar was for Series A. But it was very clear we were so far from the bar for Series A that like. 

Pablo Srugo (00:33:03):
Don't even ask, man.

Jon Noronha (00:33:04):
I don't want to get your hopes up. I don't want to lead you on. 

Pablo Srugo (00:33:05):
I'm not going to tell you how high you need to jump, cause you not going to make it.

Jon Noronha (00:33:07):
It's like, if you know, you know.

Pablo Srugo (00:33:09):
Right.

Jon Noronha (00:33:09):
You know.

Pablo Srugo (00:33:10):
Right.

Jon Noronha (00:33:10):
And I think maybe what was in the water then, is maybe you need a million dollars of revenue to raise a Series A. We had zero dollars of revenue at this point. We had thousands of users.

Pablo Srugo (00:33:18):
Yeah did you have? That was my other question. Did you have an idea of how you might monetize? I mean, I assume you just kind of cut features at one point. But had you given that much thought?

Jon Noronha (00:33:26):
Yeah, I mean, we had really good precedent in tools, like, you know, Notion, Slack, all of them. Everybody has sort of aligned on roughly this $10 per user. Seat-based subscription price point and we did enough research on our users to know that would feel natural. And I think from that point, some people would have bought. But just doing the math of how many users we had and what percent would convert. There was no way we were going to get to a billion dollars in revenue in six months. It was just not a realistic thing and so it was this really weird time as a founder. Where on the one hand, I'm finally seeing all this validation of this vision that we've now been working on for two years. We're finally seeing this thing that only we believed in attract these other believers. We have real users, who are doing real work with it and telling us they love it. But hundreds of them, not thousands of them and the number was growing maybe linearly, but not exponentially. So there's all this positive validation coming in. But there's also this sudden dread of like, it might not matter. It might actually be that even though that's all true. The rules of the game have changed so much, that our default path is actually to go out of business if we don't change something drastic.

Pablo Srugo (00:34:32):
This was before the ChatGPT moment?

Jon Noronha (00:34:34):
Yeah, ChatGPT is November 2022. We had done this launch in August and we're maybe now in September trying to figure out what to do next.

Pablo Srugo (00:34:42):
And what? Are you guys just putting up ideas, by the way? Is the team aligned? Like the founders are all aligned, on the fact that this won't be enough? Or are some people saying like, no, man. We just we just have to keep going, we're finally there and others are more like negative about it? What's the what are the dynamics?

Jon Noronha (00:34:57):
Oh yeah, definitely misaligned. I think I was the one who maybe again, being the irrational optimist product person is like, look, it's working. We're finally seeing that it's working. All this stuff we said we would do, we did, and we're getting the positive validation. My co-founder Grant, who's the CEO and I think the one who's talking most to investors. And has a finance background is watching inflation, and interest rates, and the economy. And he's the one who I think is representing the pessimism with the outside view. And he's like, it might not matter. So I think he was the one who was like, probably earlier to that than us, and yeah. That was a very painful time of trying to reconcile these two perspectives that were both correct, actually. Both of us were right about the thing we were saying. But that raised this giant question of, what do you do about it? But what became clear to us was, first of all. We probably needed to raise money and to raise money. We had to have some shiny new thing that was beyond just the traction we already had and also, we needed to create a lot more traction to stay in business. Or alternatively, we needed to pivot hard, or shrink the team, or shut down. Because we just weren't on a path that default was going to be good. So that was kind of the place we were and you mentioned the ChatGPT moment. ChatGPT hadn't happened yet, but there was the kind of the smell that AI could be that thing and the place where I picked up that smell was actually from Stable Diffusion. It was from image models. So I was seeing people sharing all these AI-generated images online. It started with, I think DALL·E and then it was Stable Diffusion. And they weren't actually good yet, but they were exciting. And they showed a direction of what was about to happen. And actually, Stable Diffusion came out the same month, August. That we had done our launch and so all of this was being talked about at the same time. That we were out there and I was thinking back to all these early conversations. We'd had about people saying, I spent all my time decorating the slide instead of figuring out the message and so this very obvious thing was like, well, what's the new clip art? It's going to be AI-generated imagery, for sure. It's going to be personalized, hyper-themed imagery on every slide that feels seamless and so we started to get excited about AI. And the reason we got excited about it was honestly. Not even because we necessarily believed in it on its own sake. But because we thought it would impress investors and we knew we were hitting a desperation point. Where we had to have something shiny and different. That we could show. That would get us that next few years of life. That would let us actually prove the product would work and so we started out doing all this prototyping, exploring image models. While at the same time, most of the team was just trying to improve the core product. On a bunch of aspects that have nothing to do with AI, like good PowerPoint export and as part of that. We also start dipping back into large language models, and we had actually played with these right when we started the company. GPT-3 actually came out right when we started the company. It was also like 2020, and so I had played with it then to see like, can this thing summarize text? Can it like do things? And the answer was just no, it wasn't very good at the time. It really fell down.

Pablo Srugo (00:37:54):
The jump to 3.5 was very big.

Jon Noronha (00:37:57):
It was, but it was very big to people who were. Because people started paying attention after ChatGPT, but it turns out OpenAI had already been improving the models under the hood and so we actually started playing with GPT-3 again. Now two years later from when we first had, and it was already a lot better. They'd already made this huge unlock, which was basically instruction prompting. So early ChatGPT would just finish your sentences. You had to write everything in the form of autocomplete. But they had really this idea of instructions. Where you say like, make me an outline for a presentation, and it could actually do it. And that was actually the thing, in my opinion, that made ChatGPT successful. It was actually tuned to respond in a natural way to things and so we started playing with large language models. And realizing like, oh, this thing can kind of make a basic presentation. And for us also, the angle for AI here was not this is the product. It was, this will help us get traction and the thing that was stopping us from getting traction at the time. Was that people were signing up for this new approach to presentations and getting dropped into a blank editor. And saying, good luck, you can make something now. And our activation rate of people actually making things was atrociously bad. Maybe five percent would actually succeed in making something good. Because people dropped in a blank page, don't know where to start, they have to learn a new tool. What are they even going to make? They don't know and so we kind of seized on this idea, of what if AI would make your first draft of the presentation? It would basically outline the text of the topics, it would fill in the bullet points on each slide, and maybe also it could do some basic imagery. And we never thought that would actually be the value prop of the product. We just thought that would speed you through the onboarding. So you could then discover all the cool things we've built and so that was the mindset in which we started building AI.

Pablo Srugo (00:39:40):
But it was still like, you would have to write the doc and you just use AI to build the slides? Or it would even help you in writing itself?

Jon Noronha (00:39:48):
No, it would help in writing itself. You would give it a simple topic like frogs and it would come up with 10 good slides about frogs, or whatever.

Pablo Srugo (00:39:54):
It's interesting, because if you think about the evolution of these products. PowerPoint is kind of the core slides, right? And even Keynote. Then slides, Google Slides, they're big 10x. Obviously, they have versioning. They have all these other things that are on the side periphery, but the big 10x is really collaboration, right? It's like real-time collaboration.

Jon Noronha (00:40:13):
Absolutely.

Pablo Srugo (00:40:14):
It's all their stuff, and then you come in. And you're kind of looking for what's the thing that's the true 10x. There's feature parity, you've got things that are better. But you're almost missing this clear reason for why you would use Gamma versus everything else and then AI comes along.

Jon Noronha (00:40:30):
Exactly right? And I think honestly, early in that time. We had kidded ourselves in thinking we already had a 10x. I think we saw all these things about our product that were so much better and we're like, yeah, it's like a 10x. But I think if I look back objectively now. Really, it was like a 1.5x that I was telling myself was a 10x. It really was genuinely better and fifty percent better is still a lot. But fifty percent better and 10x better are just different universes.

Pablo Srugo (00:40:54):
Well, the status quo is powerful and especially for something that is been around for so. Like the longer something has been around. On the one hand you'd say this, I was a founder. The more you can improve on that thing, but also the bar for improvement and getting some of the switches is that much higher. Because of everything that you didn't notice, is built around whatever status quo. Status quo for the last two years. Some stuff has built status quo for last four years. A lot of stuff is built around that and it's just going to be really hard to get people to switch. So you need to give them a clear, no-brainer reason why.

Jon Noronha (00:41:25):
Absolutely and if you really think about that 10x quote. There's an objective way of saying this. Which is, imagine it takes you ten hours to make a really good presentation. 10x should mean it takes you one hour to make a really good presentation, and there's also visual quality and stuff, but that's the bar. And if I look back on what Gamma was, I think we could have made the same thing maybe in five hours instead of ten, but that's not ten. You needed something that's truly 10x and spoiler alert! AI really was that thing. AI really could make the great thing in an hour. In fact, it could make something pretty good in five or ten minutes. So it was just a complete game changer for speeding up the product. But we didn't actually know how good it would be yet and there were still a lot of reasons to think AI wouldn't work out. It was incredibly expensive, it was incredibly slow, it was incredibly unstable and unreliable. But still, we decided to bet on it. I had bet on it early out of desperation and we got very validated. Because we bet on it and then almost immediately after we bet on it. ChatGPT came out and the world went crazy for it.

Pablo Srugo (00:42:22):
And did you go out to fundraise? Or did you just bet on it by, just putting it into your product and relaunching?

Jon Noronha (00:42:28):
We first, maybe tried to fundraise casually. But I think we found that just saying we're doing AI, was not going to be enough. We really had to prove it, not necessarily with traction. But we had to have a compelling product that really felt different. Than anything that was out there and so we decided to just commit to building. So in November, we set ourselves a target of March. We're going to launch something awesome in March. That was about the time that we had a year of runway left. March, and so we're going to do this big launch. And it really was a bet the company moment. Because if March was successful, we'd be able to fundraise and extend our life. And if it wasn't successful, then we probably would have had to either shut down or have a really sad situation. Where we cut most of the team and then try to limp along on some other idea with the runway that's left. But we didn't necessarily even have a next idea. So it would have been rough, if we'd gone down that path.

Pablo Srugo (00:43:19):
And what do you scope out as that version one. That you're going to launch in March?

Jon Noronha (00:43:23):
It actually ended up being a lot. I think it was incredibly focusing to have that deadline and to know the stakes. Someone recently used the quote on me, that pressure makes diamonds and we felt tremendous pressure. But we also actually had a lot of clarity. Because we knew we wanted to make something amazing with AI, and we also now had all these users from our previous launch. Who were telling us exactly what they needed out of the product and there was a lot of regularity in what was coming up. So from the AI side, we knew we wanted to have this incredible generation experience. Where you just sign in, write a one-line prompt, and then we will make an entire presentation for you of like 10 slides and it needs to look good. Also, from our users we already had, we knew that we needed things like many more visual layouts. But we also knew we needed things like PowerPoint export. That had nothing to do with AI, and we kind of knew the list. We knew what it would take to make this product actually good. It was a bunch of the feature parity core product stuff on one side, and then one really great first five minute experience with AI. That would give you that wow moment and so, we bet on both. And we just worked really hard those four months to make both happen.

Pablo Srugo (00:44:28):
There are still eight of you on the team?

Jon Noronha (00:44:30):
I think we were twelve at this point, actually.

Pablo Srugo (00:44:32):
How did you structure this, March 2023 launch?

Jon Noronha (00:44:36):
Well, everybody was working on it and I would say. It was basically like everybody was working on one big thing. Everybody had like one big feature they were launching towards. There was some collaboration, but we each had a lot of heroes on the team. Who I think each stepped up to do a major chunk of it. Including some things that were more about the marketing launch itself. We put a huge amount of energy into a launch video. We wanted to have a really great launch video and our designer. Who has no video production background, Melissa. Ended up making the whole thing in Figma. Which is not a video production tool, but it was just a desperation thing and we had to make something happen. And she managed to pull it off somehow. And there were a lot of moments like that in marching towards this.

Pablo Srugo (00:45:16):
And you released again on Product Hunt? Or what was the distribution strategy?

Jon Noronha (00:45:20):
No, we decided we would just use Twitter and LinkedIn this time. We've been seeing promising results from those. We would use this launch video. I think we also used Product Hub, but it wasn't the main focus. We also wanted to get investor attention, and we felt like actually Twitter was the place to do it. And so we really put a lot of work into launch video. And we made the most click-baity tweet of our lives, to get this thing out. We're like, we don't care how shameless it is. This thing just needs to go well.

Pablo Srugo (00:45:44):
What do you? Do you remember it?

Jon Noronha (00:45:46):
Yeah, it was something along the lines of, the most valuable skill in business is about to become obsolete. Introducing AI for presentations.

Pablo Srugo (00:45:55):
Nice.

Jon Noronha (00:45:56):
And we wanted to be provocative. We wanted to be cringed, because we just wanted people to engage with it. We knew what the stakes were and that led you to this video. Which totally oversold what the product actually did. Not only did the product, which just got you into this AI moment. So fast forward to end of March. We do this launch and it's about the company launch. We release it and it actually doesn't go that great, at the beginning.

Pablo Srugo (00:46:19):
Oh shit.

Jon Noronha (00:46:20):
It goes okay, you know, we do get. We do get hundreds of people engaging with the post. We get maybe another thousand signups, but it's probably actually smaller than that first product launch. That we did and it needed to be.

Pablo Srugo (00:46:30):
Crazy.

Jon Noronha (00:46:31):
10x bigger and I'm feeling pretty pessimistic about it. I'm like, maybe this is enough. Maybe it's cool that we can pull out some kind of investment from somebody. But this is definitely not the liftoff scenario, that I had really believed it could be. So I'm feeling kind of disappointed. But then the funny thing that happens is, the tweet goes viral delayed. So two or three days after it gets posted, all these VCs start engaging with it negatively. I actually remember Paul Graham replied to the tweet and said, making slides is not the most valuable tool in business. Anybody who thinks this is not making a good business. The way to make a good business is to make a good product.

Pablo Srugo (00:47:15):
Exactly, fell into your trap.

Jon Noronha (00:47:16):
All these VCs, it just starts a conversation around slides and how slides don't matter, and how only product matters. All of that negative engagement actually gets more people engaging with the tweet. We're also spamming every AI influencer we can find to retweet us. Which this is a new thing that had sprung up around this time, was AI influencers. People that just post about cool new AI tools. Some of them start to engage with it and so it's actually on day two or three. That this thing starts picking up and we actually start to have more signups on day three than we had on day one. And then the really kind of magical thing that starts happening is, we start to have more signups on day four than we had on day three. And at some point, what starts to happen maybe after day six or seven is. We're getting people who are not signing up, because they saw social media. They're signing up, because someone else signed up for Gamma and told them about this really cool experience they had, going through that onboarding flow. Because it turns out, even though we had not maybe perfectly nailed the launch moment. We had nailed the product first five minutes. So we had nailed the onboarding experience. People were going in, they were typing in a topic, and they were getting a presentation that actually felt kind of good. Maybe not great, but it was enough to give them that wow. That same wow they had when they used ChatGPT for the first time and this was genuinely different than ChatGPT. Because it was something visual and it was a real work product they were getting out. Not just answering questions, you know? So I think it resonated in the moment and it was just good enough. That it actually bent the curve of usage and we started to see more users signing up, more users engaging. And the very beginning of this viral loop started that April, probably. Where every day people sign up, tell their friends and we get more signups than the day before.

Pablo Srugo (00:48:59):
And you're just kind of growing week over week after that?

Jon Noronha (00:49:02):
Yeah, growing week over week. You know, we're starting to get maybe 2,000 signups a day, 2,500 signups a day, 3,000 signups a day and that just accelerated all through April. And by the end of a month, it actually started to get crazy. Everything started to go off the rails. We had intercom support and it started getting flooded with more, and more people asking us questions. All in different languages that we didn't speak, and I'm like, how do I even respond to this person in Hindi? I don't know Hindi. I was sending out emails to every person who signed up asking for feedback, and previously I was getting two responses a week. And suddenly I was getting twenty or thirty responses a day, to my automated email. And then I was getting fifty responses a day. And I started getting really stressed, because I'm just trying to keep up with intercom. But now I'm getting all this product feedback of like two paragraphs and I'm like, how do I respond to this? This person wrote me two paragraphs. I have to respond to them, but there's literally not enough hours in the day, and then we start getting even more of these intercom messages. And the tone of them changes from like, hey, this bug's wrong, make it work. To why can't I pay for more usage? We had put a limited number of credits you could use the AI with, in our first launch and when we did this. We had  400 credits, and they just ran out. And there was no way to get more early on, besides referring people. And people are like, what the heck, dude? Why can't I just pay $10 and get more credits? Why don't you have this? This is the most obvious thing in the world. We're like, it is the most obvious thing in the world. I can't argue with you there, but we had just not gotten to it. We were so focused on core product and making it good. That there had been no time to build a Stripe integration. Because we didn't know anybody would want to buy it, and so now we're in May. And we are frantically building monetization. And I think over a period of three or four weeks. We get to the point, where we can start monetizing and getting people to pay. And meanwhile, everything is just heating up. There's more intercom, there's more emails, servers are starting to break in various ways. I remember by the time we got to.

Pablo Srugo (00:51:01):
Do you remember the numbers? Like month one, month two, month six, month twelve, something like that? Just paint a picture of like, number of total users, number of MAUs sort of thing?

Jon Noronha (00:51:10):
Okay, yeah, so maybe month one. We're talking like two or three thousand signups a day and maybe it, I don't know, a couple thousand MAU. Month two, now we're at ten thousand signups a day and maybe, I don't know, fifteen thousand MAU. Month three, it starts to get insane. There's like fifty or sixty thousand signups a day. It's just not slowing down. 

Pablo Srugo (00:51:32):
Holy shit.

Jon Noronha (00:51:33):
There's just like more and more people.

Pablo Srugo (00:51:34):
Wow.

Jon Noronha (00:51:34):
Everything is breaking. We had this awful week, where we had two days of nonstop outages and nothing we could do to could get this one part of our pipeline to work. And people were so mad at us. And we had actually just shipped monetization like the week before.

Pablo Srugo (00:51:49):
And what's that? It's pure referrals, right? Like it's just classic, one person coming in. Telling five people and that just keeps going.

Jon Noronha (00:51:57):
Yeah, someone told me that product market fit is the moment you stop worrying about how to get new users and start worrying about how to keep up with the users you have. And that had already happened, in May, probably. It's like, suddenly we stopped trying to do any influencer outreach, we stopped trying to market ourselves and we're just like, what the heck do we do with all these people? And so, yeah, they're coming in like crazy. We're trying to keep up. We'd started monetizing. But, you know, very small scale just to figure it out. We had actually just shipped real monetization and we had this terrible outage that lasted for like three days. Where everything was broken and we're like, dammit! We finally got everything working and now we're like dooming ourselves. We're totally breaking this funnel. Because everything was broken and I still remember. The day we came back, we were down like Monday through Wednesday. The day we came back was a Thursday. Not only was it a Thursday, it was the 4th of July. When nobody's working and we had this record sales date. We had this insane record sales date. Where suddenly we were making like $50,000 and I was like, where did this come from? Who's even working today? Turns out, what had happened was all these people saw that we were down and assumed that they had to pay to make the product actually work. Which wasn't true, it was down for the paying customers too. But that happened and also it was people buying us from like Brazil and France, and Korea. They don't have 4th of July, and so suddenly we're like. And we already knew we were an international product. Because our intercom was blowing up with people in all these languages, and that's where it's kept on ballooning. And we will go viral in one country after another. There would be an Instagram post, somebody would make about Gamma in Russia and suddenly twenty thousand Russians would sign up. And then we would get twenty thousand intercom messages in Russian saying, how do I pay for your product? It's like, what do we do with this? How do we handle it all?

Pablo Srugo (00:53:37):
How much of this? By the way, do you think was the. This is hard to breakdown. But how much of this is just the raw value of the product? And how much of it is the newness and the overall hype? This is a time where a lot of AI tools go viral. Because everyone's like, I can't believe you can do this. A lot of them end up churning out and all these sort of things. You know what I mean? When you think about that moment for you. What weight would you put on each?

Jon Noronha (00:54:04):
I think it was eighty percent hype. 

Pablo Srugo (00:54:06):
Okay.

Jon Noronha (00:54:07):
I think there was people out there. That wanted to see cool AI stuff and wanted to know how AI could be useful for them. So there was all this demand and they were waiting for supply, to come and supply it. And we actually supplied something that was more useful than most of what was out there. But honestly, the product still wasn't delivering that much value and I think the best sign of that was, we still had terrible churn. I mean, most people who signed up didn't actually stick with the product. Most people who bought didn't stick with the product. There was this incredible flood of initial interest we could barely handle, but it was a very leaky bucket, and so clearly we had so much to do to improve the product during that time. And also, even just beyond product improvements. It was clear that a lot of these people were signing up with no actual intent to use it. They just wanted to try a new thing and see what it was. I think this is when the term AI tourist first emerged. Everybody was just signing up to see what can these tools do and they were popping in. Trying it out, saying like, oh, that's kind of cool and then disappearing again.

Pablo Srugo (00:55:00):
How fast did you get? Like once you turned on monetization. How fast did you kind of figure out retention and then get to like a million ARR, for example?

Jon Noronha (00:55:07):
So we frantically built monetization in May. We turned it on in June gradually. We actually ran some A/B testing on pricing in June. So to even figure out how we should monetize. So we didn't really roll it out until early July, and this is the crazy thing. So we fully roll out monetization by early July. I believe, if I have the numbers right. That by August, or maybe it was early September. We crossed a million ARR and became cashflow positive.

Pablo Srugo (00:55:35):
Oh my God.

Jon Noronha (00:55:37):
It was completely crazy. Yeah, it was so wild.

Pablo Srugo (00:55:40):
So I assume, raising once again was back to being really easy.

Jon Noronha (00:55:44):
Yeah, not only was it really easy. It was unnecessary. I mean, we had very little money in the bank.

Pablo Srugo (00:55:48):
Right.

Jon Noronha (00:55:49):
But you could just see the shape of this curve. Way more money coming in the door than leaving the door.

Pablo Srugo (00:55:53):
Insane.

Jon Noronha (00:55:54):
Like, oh, now it's like maybe we don't need to fundraise at all. We actually had already raised a little bit more money. Maybe before this, maybe in like May/June. Because we were still in survival mode financially and we didn't yet realize how easy monetization would be. So I think we raised another $2 or $3 million at that point. Just as like insurance, mainly from angel investors and in retrospect, that round turned out to be unnecessary. We actually still have not spent any of that money we raised. But we didn't know that then.

Pablo Srugo (00:56:24):
When did you end up raising the Series A?

Jon Noronha (00:56:25):
So we then decided at the end of that year, like December. That we would raise a Series A. We wanted to have enough of a war chest to never worry about running out of money again and we also wanted the credibility of being a real Series A company versus Series C company. When it came to hiring, but at that point, we were strongly cashflow positive. We didn't really need the money and so we decided we didn't want to take too much dilution. Of some new firm coming in that would want twenty percent ownership, and so we decided to raise money from our existing investor, Accel. Who'd led this fees round and so, yeah, we raised from them in December-ish.

Pablo Srugo (00:57:02):
How much was the Series A?

Jon Noronha (00:57:03):
So we ended up raising $12 million Series A from Accel, and that was, yeah. Roughly December 2023, and that's the last time we fundraised.

Pablo Srugo (00:57:10):
Are you back to cash flow positive now?

Jon Noronha (00:57:13):
We have been cash flow positive pretty much continuously for two years now, yeah.

Pablo Srugo (00:57:17):
That's epic, man. Cool, well listen, let's stop it there. I'll ask the last three questions that we always end on. The first one is, when did you feel like you had true product market fit?

Jon Noronha (00:57:31):
It was very quickly after we did that AI launch. Maybe three or four weeks after, and it was the moment that our support broke. And we were just dealing with a flood of users. We didn't even understand what they were trying to use the product for. We had no idea where they were coming from. But they were all begging to pay us money, and I was just like, damn. That's a completely different feeling than what the startup thing, has felt like before this.

Pablo Srugo (00:57:54):
Was there a time, when you thought this will not work out at all? Maybe everything was just going to fall apart and fail?

Jon Noronha (00:58:03):
Yeah, so there was totally a period. In those few months before we sort of launched this AI stuff. Where the world around us just felt like it was going crazy. Inflation was going crazy, interest rates were going crazy and then there was this moment. I think it was February, and we were launching in March. Where Silicon Valley Bank collapsed and that was the bank that had all of our money. So we're already at this moment, where we are down to our last year of runway. We don't know how we're going to make it, but maybe we can make it a couple of months and then suddenly it's like, can we even make payroll on Monday? And I just remember it feeling like such a gut punch on top of everything else going on. How is this ever going to work?

Pablo Srugo (00:58:38):
And last question, just having gone through everything you've gone through. What would be your number one, top piece of advice for another early stage founder?

Jon Noronha (00:58:47):
My experience. Which is not everyone's experience, is that it's all a game of endurance. You really have to just stay out there long enough for your luck to hit. It doesn't mean you should stick with one idea forever. I think you have to know what the right sign of conviction is, but these overnight successes really aren't. Anybody who hears about Gamma now, has probably seen us grow crazy over the past two years. But there was three years before that, where we were stuck at a flat land and trying to find our destiny. And we couldn't have hit the hockey stick if we hadn't had the flat part first. And so you really do have to power through, and that's true on multiple levels. I mean, I think the biggest level it's true on, is your own morale and energy. You have to really prepare yourself for a long slog, but it's also true on the money side. I actually wish we had raised more money in the good times, when we could have. Because we had a long period we had to survive and I think back to. If we'd even raised, I don't know, like ten percent less. We wouldn't have actually survived long enough to get to that point, where we made it.

Pablo Srugo (00:59:43):
Cool, man. Well, Jon, thanks so much for jumping on the show. It's been great having you.

Jon Noronha (00:59:47):
Awesome chatting. Yeah, I love a chance to chat.

Pablo Srugo (00:59:49):
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